ghana engages in risky debt negotiations following the imf deal

Ghana engages in risky debt negotiations following the IMF deal

Since it gained its independence, Ghana has requested assistance from the International Monetary Fund a total of seventeen times, which works out to an average of once every four years. However, obtaining a rescue package from the multilateral lender proved to be a more straightforward task this time around.

Not least of all, since a large percentage of Accra’s external debt is owned by private lenders who want all of their money back, there is still a tonne of work for Ghana’s authorities to do to convince creditors to offer over $22 billion in debt relief.

Commercial lenders, including bondholders, are responsible for holding 76% of Ghana’s total external debt. The next largest holders of Ghana’s debt are multilateral development banks, with the Paris Club and China each holding a sizable portion. Bondholders are especially reluctant to make any concessions, and the geopolitical nature of debt makes it even more difficult to reach an agreement on debt relief. Ghana is also in default, which makes it even more difficult to reach an agreement on debt relief.

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An economist and a visiting senior fellow at the Africa Policy Research Institute, Theophilus Acheampong is a professor at the University of Ghana. He joins the show to provide commentary on the difficult debt restructuring negotiations that Accra is currently engaged in with its creditors.

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